Friday, January 30, 2009

Take 2 Aspirin and Call Me With Your Credit Score

This is an Encore Post that originally ran January 28, 2008. I thought this especially appropriate considering Tuesday's post and issues with health care today.

In searching for something interesting to write about for you today I came across this article about how credit scores may soon be used by hospitals. Healthcare Analytics, a Massachusetts health technology firm, is developing the medFICO score with funding from Fair Isaac; Dallas-based Tenet Healthcare Corp.; and a venture capital firm. The intent is to aid hospitals in assessing a patient’s ability to pay their medical bills. The firm is gathering payment history information from large hospitals around the country, the data will be analyzed to predict how likely patients are to pay future medical bills. The medFICO score is scheduled to be released as early as this summer.

Okay, logically this makes a little bit of sense . We all know that hospitals loose boat loads of money every year from unpaid services. And we can’t ignore that hospitals are big business and not just nice places that help people when they are sick or injured. But this idea just raises all sorts of questions. What are the possible abuses of this data? Will those with lower scores receive poorer care? Already we see that Medicare recipients get back of the line treatment. What about privacy? What about reporting errors (you know there will be errors)? What about identity theft? And what would this do to insurance?

At least when you apply for a loan it’s a planned event. You can review your credit score first and work on discrepancies to improve it, thus receiving a better loan rate. But hospital trips aren’t always planned.

So is this legal? Yes, the Fair Credit Reporting Act, states that hospitals and doctors are allowed to report health care debts to credit reporting agencies, but they cannot indicate the specific type of service. Credit Reporting bureaus only report a data score and do not show the types of services that were received. The proposed medFICO score would be legal as long as it only includes billing data. And unlike a standard report, which only lists late medical bills, the medFICO score would reflect a history of on-time payments.

Individual hospitals will have the option to use this data by administrative and board decisions. You can bet, however, that the developer, Healthcare Analytics, will do their best to market and sell the benefits of medFICO and it will like become the norm.


  1. The article you based your column on unfortunately was not well researched. Some of its errors crept into your column too. For example, there has never been a "medFICO" score. For accurate info on this topic I encourage you to visit

  2. Thanks Craig I appreciate the information and the link to this article. I am so glad to be corrected and learn this, "Fair Isaac and Connance do not own any financial or medical information about specific patients. The data used for developing products in this field has been stripped of all identifying information."

    and further, this, "We look for significant patterns in a large number of data records to better predict consumer behavior."

    thanks again